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Commissioner's Bulletin # B-0004-12

January 30, 2012

To:
All insurance companies, corporations, exchanges, mutuals, reciprocals, associations, Lloyds, or other insurers writing workers' compensation and employers' liability insurance in the State of Texas, their agents and representatives, and to the public generally.

The Texas Department of Insurance (Department) accepts the National Council on Compensation Insurance (NCCI) advisory loss cost filing with an effective date of June 1, 2012. Insurers may use NCCI's advisory loss costs as an alternative to the classification relativities. Insurers planning to adopt the June 1, 2012, advisory loss costs must comply with the requirements in the Summary of Actions Required by Insurers.

Additionally, the Department will not amend the June 1, 2011, workers' compensation classification relativities and experience rating values in the Texas Basic Manual of Rules, Classifications and Experience Rating Plan for Workers' Compensation and Employers' Liability Insurance.
For all workers' compensation policies written with an effective date on or after June 1, 2012, each workers' compensation insurer must continue to use the June 1, 2011, classification relativities, unless the insurer files to use its own independent insurer-specific classification relativities or files to use the June 1, 2012, NCCI loss costs. Insurers may not base their rates on the June 1, 2011, NCCI loss costs for policies with an effective date on or after June 1, 2012.
Insurers must continue to use the expected loss rates and discount ratios adopted by Commissioner's Order No. 11-0125 to calculate experience modifiers with an effective date on or after June 1, 2011.

Required Actions

Insurance Code Section 2053.003 requires each insurer to file with the Department all rates, supplementary rating information, and reasonable and pertinent supporting information for risks written in Texas. Insurers must submit the required documents as outlined in the Summary of Actions Required by Insurers no later than May 1, 2012.

Insurers that elect to maintain their existing TDI classification relativities and deviations may do so without submitting a filing at this time. An insurer that is not currently writing workers' compensation insurance must complete and submit a filing and the attached Notice of Carrier Intent and Certification to the Department before the effective date of its first policy.

Insurers that fail to comply with filing requirements may be subject to regulatory action.

Filing Forms and Exhibits

Filing requirements are specified in the Property and Casualty Filings Made Easy Guide at: http://www.tdi.texas.gov/pubs/pc/rspceasy.html. Insurers may provide the required information using the transmittal form and filing exhibits in the Filings Made Easy Guide, or in their own forms and formats. Rate filings must include a transmittal form, supplementary rating information, and pertinent supporting information for proposed changes in an insurer's deviation, loss cost multiplier, or other rating factors.
You may download this bulletin, the Summary of Actions Required by Insurers, and the Notice of Carrier Intent and Certification from the Department's website at http://www.tdi.texas.gov/bulletins/index.html.

You may also request a copy by contacting the Property and Casualty Actuarial Office by phone at (512) 475-3017 or by e-mail at pcactuarial@tdi.state.tx.us.

For further information or questions concerning this bulletin, please contact Elizabeth Buhro in the Property and Casualty Actuarial Office at (512) 305-6747 or by e-mail at elizabeth.buhro@tdi.state.tx.us.